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As promised, I have my new blog up and running at www.desertlawblog.com. You can click on the following graphic to take you there.
And as an added bonus, a Phoenix Business Journal article about the proposed expansion of the border crossing at Lukeville. It appears the expansion will be completed in 2009. Interesting will be the political implications of Governor Napolitano (who supports the border expansion) moving to head the Department of Homeland Security (which oversees the federal border funding and operations) while Secretary of State Jan Brewer (who may want to cut funding for the border expansion) moves into the Governor's office in February 2009. Could be an interesting 2009 for the Lukeville border.
I have received many emails over the past several months to ask what happened to the postings on PuertoPenascoPost. My most recent post here was in April of this year. That post coincided pretty closely with the beginning of my studies for the Arizona bar exam (a daunting, time-consuming task).
I'm happy to report that since then, I have passed the Arizona bar exam and am now fully licensed to practice law in Arizona. For those of you who don't know me as well, my original work background was practicing corporate/transactional law in a major Chicago law firm. Following that I set off to do real estate development in Arizona and eventually ended up focusing most of my efforts in Puerto Peñasco.
With the economy in its current state, I have decided to turn back to the law and am happy to let everyone know that I have decided to open up my own private law practice. You can read more about it here if you wish. I will be focusing on company formations, business transactions, real estate, securities and general corporate law in my practice.
No doubt I will still be making frequent trips to one of my favorite destinations, Puerto Peñasco, for the beaches, Pollo Lucas chicken, the papas at the taco stand on the corner of Melchor Ocampo and Sonora, a couple of Sols and of course to see many of the friends I've made over the last three years.
As for the state of the real estate industry there, I will just say that there are many great things to come for the town that used to be a sleepy fishing village. Like Arizona, it is feeling the current hangover from the weak economy and some oversaturation. But I can say with certainty that in 10 years, the people who decide to buy a condominium in 2009 and 2010 will be very happy that they got in when they could still get a great place on the beach for the future generations of their family for a bargain price.
Hopefully all of my readers are well and I expect that I will be blogging soon about real estate in the context of the law. I will put a link up here when I have it up and running and hope to hear from you then.
I've been spending most of my time in Phoenix recently and therefore haven't been able to post quite as much of the happenings down in Puerto Peñasco (Rocky Point) as I'd like. So expect updates a little less frequently over the next several months.
Things I've been reading this past week...
An article from the Arizona Daily Star [free subscription required] about the long-term feasibility of desalinated water for Arizona (mentions Rocky Point). The same environmental and energy issues exist for the feasibility of a desalination plant to supply all of Puerto Peñasco (a study of this has been commissioned).
A recap of President Felipe Calderon's remarks at Tianguis Turistico 2008 from Mexico Premiere.
The temporary take-over of the Mexican congress by legislators who oppose reform of Pemex ended over the weekend with an agreement for 71 days of debate over the Pemex reform proposal offered by President Calderon.
Brian Flock from Mexidata writes about the rise of the MLS in Mexico.
ALSO: Dutch DJ Fedde la Grand showed up in Puerto Peñasco last month and drew a few thousand to a couple of shows. Probably the first internationally recognized electronica DJ to come to town (hopefully the first of many). I missed the shows but video can be seen here and here.
What I've been reading this past week...
A recap of Tianguis Turistico 2008 from Mexico Premiere.
The World Economic Forum on Latin America also was held this week in Cancun, Mexico.
An article about cost of living in Mexico from Brian Flock at Mexidata.
An article on investment in Mexico from 4hoteliers.com.
A great story about a firefighter from Surprise, AZ who saved a life in Rocky Point.
The news out of Puerto Peñasco (Rocky Point) today is a second condominium resort under development that has secured a significant partnership with a private U.S. capital company. A week after Omega Commercial Finance Corp announced its joint venture with BBB Developments to help finance the continuing development of Los Corales Condominiums in the Mirador area, Strategic Capital Solutions out of New York announced a major equity investment in Villa Cortez, located in Playa La Jolla.
According to the press release, certain contingencies, such as finalizing the paperwork on a construction loan for the first phase of Villa Cortez (to be provided by Strategic Capital) and hiring an experienced hotel management company to run the resort, still need to be met for the project to move forward. But it is another good sign that some of the condominium developments in Puerto Peñasco are beginning to find creative ways in slower times to move forward and get projects built (despite these equity infusions not necessarily being that favorable to the developer's profits).
An interesting interview by Business News Americas with Claudia Velazquez, the market studies director of Softec, focusing on the Mexico real estate market. Softec is a real estate consulting and market study firm in Mexico.
President Felipe Calderon's speech this past week submitting his new energy bill to the Mexican Senate. The major goal of the bill is to allow state-owned Pemex to enter into joint ventures with private companies to increase capacity for deep water oil exploration in the Gulf of Mexico and to increase refinery capacity for Mexico. Mexico currently does not possess the technology for this deep sea exploration and drilling. As expected, the bill is running into major opposition from the leftist political parties in Mexico.
CNN International article about the same topic.
An article in the Dallas Morning News about the Mexican real estate market. It primarily focuses on Puerto Vallarta but does relate to Puerto Peñasco.
Tianguis Turistico, the Mexican tourist promotion conference, is taking place in Acapulco this week.
A very well-written, comprehensive AZ Daily Star article about Americans turning to Mexico for health care [registration required]. This includes a discussion about U.S. health insurance in Mexico.
The C. David McVay School is traveling to Puerto Peñasco (Rocky Point) in May to conduct renewal courses for Arizona Realtor licensing. From May 7 through May 10, C. David McVay will hold two real estate continuing education classes per day at the Sonoran Sky on Sandy Beach. All courses are approved by the Arizona Department of Real Estate.
This is a great opportunity for Arizona realtors to travel to Puerto Peñasco to help satisfy their Arizona continuing education requirements, reacquaint themselves with Puerto Peñasco and to enjoy some time in Mexico. It is also a great opportunity for Puerto Peñasco realtors who are also licensed in Arizona to satisfy their continuing education requirements.
BBB Developments announced today that it has signed a letter of intent for a joint venture with Omega Commercial Finance Corp (OTCBB: OCFN) to secure financing for construction of Los Corales Condominiums, located in the Mirador area by Manny's. According to the press release, they will close on the financing deal with Omega within 90 days and construction will begin thereafter.
As the press release points out, this is not conventional construction financing. It appears from the details in the press release that Omega had been working on behalf of BBB to secure construction financing to build Los Corales for awhile but was unsuccessful. Instead Omega has decided itself to take an equity stake in the development of Los Corales and will receive 45% of the profits in return for providing construction financing. This arrangement was made possible by Los Corales having 108 of its units pre-sold (again, according to the press release).
This arrangment both underlines the difficulty Puerto Peñasco (Rocky Point) developers face in obtaining construction financing for projects in Mexico and a creative financing solution to getting a project built. During real estate boom times in Puerto Peñasco, many developers were able to build entire condominium resorts only using financing from buyers' 30% down payment deposits. Now that the market has slowed down, developers must work to secure more traditional construction financing for their projects - which is only just beginning to be available in Mexico. So it is good to see U.S. finance companies take a financial interest in the Puerto Peñasco market in this form, even if it is only a start toward better access to credit in Mexico for developers. It also shows confidence in the future of development in Puerto Peñasco (albeit by a finance company that is not well known).
And, of course, a by-product of better access to credit for developers in Mexico is that buyers can be more confident that their condominium will get built in a reasonable amount of time and won't have to rely on the continuing success of sales for completion of the project.
I will update with added pictures to my Construction Update Page once I see ground broken on Los Corales' site.
A few articles related to Puerto Peñasco (Rocky Point) that I read this past week...
Arizona Republic article about the continuing widening of Route 85 between Phoenix and Puerto Peñasco.
Reuter's article about the strength of the Mexican mortgage market.
Mexico Premier blog post about the different regions of Mexico.
The Arizona Republic reprints the LA Times travel article from February, instead of taking the time to send someone from their travel page to visit and write up Arizona's most popular seaside vacation destination.
Arizona Republic article about Mexican dentists (that mentions Puerto Peñasco).
Arizona Republic article giving "Tips for Rocky Point first-time renters."
Coldwell Banker - Rocky Point passed along a recent press release about owner and broker Jonni Francis being awarded the CRB (Certified Real Estate Brokerage Manager) Designation conferred by the Council of Real Estate Brokerage Managers (CRB). Congrats to Jonni on this significant achievement.
The full press release can be read after the jump... Rocky Point is Puerto Penasco.
I have been informed that effective immediately, the Aeromexico flights between Los Angeles International Airport (LAX) and Puerto Peñasco (PPE) have been suspended indefinitely. My sources confirmed that the flights typically were carrying no more than five passengers per trip (out of 33 total seats available) and were sometimes cancelled because of no bookings. This led Aeromexico to decide to suspend these flights at this time. No word on whether they will resume in the future.
To add some background, the local developers group (ADITURPP) and Aeromexico worked together to put together and subsidize these flights to L.A. It was determined that targeting Los Angeles for these initial commercial flights into the U.S. would open up a new market to Puerto Peñasco (Rocky Point). Phoenix was not considered for a route because it already supplies many of the tourists to Puerto Peñasco and is within an easily driveable distance.
Looking back on this decision, it seems to be well-intentioned, but poorly executed. Much of the promotional efforts for the Puerto Peñasco flights in Los Angeles did not swing into full gear until well after the flights had already started. The flights also began during the traditionally slower seasons instead of beginning in March (Rule of thumb: every Puerto Peñasco business should have its grand opening in February or March). It has proven difficult to coax a population of people - who already have beaches and an ocean - to a relatively unknown Mexican vacation spot without a sustained advance promotional effort - particularly when for about the same price, Angelenos can fly to Cabo, a much more developed vacation destination that is more familiar to Californians. Hopefully in the near future, as Puerto Peñasco progresses, commercial flights from locations like Los Angeles will become more viable and in demand.
In the meantime, I am hoping that Aeromexico or another carrier will recognize the potential for flights between Phoenix and Puerto Peñasco. The continuing Aeromexico flights between Hermosillo (HMO) and Puerto Peñasco have been relatively successful because of the high volume of traffic and trade between the two cities. Similarly, Phoenix and Puerto Peñasco are closely linked. I think a commercial flight between the two cities would prove successful as there is a growing vacationing population in Phoenix that owns a condominium in Puerto Peñasco but would prefer not to drive or deal with potentially slow border crossings. There is also a significant population of business travelers who I think would utilize this route (similar to the HMO-PPE route that carries many business travelers).
While the suspension of the LAX-PPE flight is a small setback for Puerto Peñasco, I think it is temporary and can be chalked up more to the town getting a year or two ahead of itself and to well-intentioned, but poorly executed planning. In the immediate future, Puerto Peñasco will continue to cater to its bread and butter base - tourists who drive - and eventually commercial flights will be phased into the equation as the new Puerto Peñasco international airport opens. Rocky Point is Puerto Penasco.
The thing that immediately jumped out at me from the press release is that they will be accepting "enhanced drivers licenses" in lieu of passports or passport cards at the U.S. border. Arizona is working on a program to provide these enhanced drivers licenses. The final rule will be effective June 1, 2009. Senator Leahy (D-VT) has a mixed reaction to it.
Check back for more from me this coming week. In the meantime, keep bringing your passports or drivers licenses and birth certificates to Puerto Peñasco (Rocky Point). Rocky Point is Puerto Penasco.
OuttaTown Productions from Phoenix puts on a beach volleyball tournament in Puerto Peñasco (Rocky Point) twice a year. These tournaments have become quite a popular sporting and social event for vacationers, drawing nearly 80 teams of all competition levels to last year's October tournament. The spring tournament this year is on April 19, but the registration deadline for teams is April 2nd.
The event is held at Playa Bonita Resort on Sandy Beach and OuttaTown assists teams with hotel reservations and other arrangements. The theme for the spring tournament is "Cannonball Run." More information about the tournament registration and event can be found here. And for a bunch of pictures from last October's tournament in Puerto Peñasco, click here. Rocky Point is Puerto Penasco.